So if GM goes bankrupt...

[SKANE]

What do you think happens? They are asking for another 2 B by next month and up to an additional 16.5 B total bringing our total investment up to 30 B. Do we give it to them? If they go into bankruptcy, do you think it will start an avalanche of smaller companies filling?
For the record, I thought letting Lehman fail was the start of this problem but what do I know, I manage hazardous waste for a living. At least for now I do.

[K.C.]

They won't go bankrupt. The government will never allow it to fail.

Chrysler...maybe. Not GM. Not Ford.

[SKANE]

At what cost though? Total of 30 billion is huge. I heard the CEO of Auto Nation talking recently. His opinion was gas prices need to be stabilized to allow auto makers to ramp up for production. If gas is at $4 bucks a gallon they need fuel efficient cars. At $2 a gallon fuel efficient cars don't sell as well.He said he has a glut of fuel efficient cars and people want SUV's again. His answer was to tax fuel when it is low to keep it at $4.
It takes a while to change between making fuel efficient cars and SUV's . With gas prices constantly swinging how do they figure out what to make?
How long do we keep giving them money? Will this potential 30 billion be enough or will we be going through the same thing in early 2010?

[JimBeam]

How insane is that that we're giving a private company 30 billion dollars ?

Does that mean their shareholders should never make a profit until the money is paid back ?

How else is it fair to give a company like that money ?

[Serpico1103]

Corporate welfare. Why give money to people who will only buy things from the corporation with it. Skip the people and give it right to the corporations.
Capitalism is grand.

[SKANE]

To be fair, right now we have 13.5 Billion invested with them and they are seeking another 2 billion by the end of next month. The balance is what they figure they will need by the end of the year. I'm not good at adding links but I found this information.

GM posts record profits
Last Updated: Friday, November 10, 2000 | 11:57 PM ET
CBC News
The world's biggest car company said Tuesday it earned record second quarter earnings of $1.8 billion US on revenue of $48.7 billion.

It's going to take a while for them to pay us back.
Like I said in the original post, I don't know what the right solution is. I don't see anyone benefiting from a bankruptcy short term. Too many people losing their jobs. But it's hard to rationalize throwing money at what appears to be a sinking ship. That goes for Chrysler and Ford as well. ( Although Ford has not received any bail out money at this point) One nationalized car company? What would be the cons?

[epo]

I thought we already had this discussion? (http://www.ronfez.net/forums/showthread.php?t=74367)

[K.C.]

How long do we keep giving them money?

Until Global Warming sinks the continent.

I'm not stating my opinion one way or another. I've stated my opinion on the auto industry many times on this board.

But I am stating the facts...and the fact is that the U.S. government, as presently constituted, will NEVER let GM and Ford fail.

Absolutely never.

[SKANE]

Agreed. I'm just wondering if it's the right move.
Epo, sorry. New to this and didn't realize there had been brought up before.